ITO 20(2)(2), MUMBAI V. MANU K SHARMA, MUMBAI

ITA 1388/MUM/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 83704 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 6 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-09-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 28-08-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 17-02-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PARMINDER
• Keywords: Unexplained cash credit; Unexplained investment
• Section: 68

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL G B ENCH, MUMBAI ! , ' #$ % % % % , &' . % . () . % . #$ * BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER AND DR. S.T.M. PAVALAN, JUDICIAL MEMBER ./I .T.A. NO.1388/MUM/2011 ( + + + + / ASSESSMENT YEAR : 2006-07 THE ITO-20(2)(2), PIRAMAL CHAMBERS, LALBAUG, MUMBAI-400 012 / VS. SHRI MANU K. SHARMA, 31, MANISH NAGAR SHOPPING CENTRE, FOUR BUNDALOWS, ANDHERI (W), MUMBAI-400 058 $, ' ./ - ./ PAN/GIR NO. : AAFPS 0730C ( ,. / APPELLANT ) .. ( /0,. / RESPONDENT ) ,. 1 / APPELLANT BY: MS. PARMINDER /0,. 2 1 / RESPONDENT BY: SHRI SUBHASH CHHAJED 2 3)' / DATE OF HEARING :28.08.2014 45+ 2 3)' / DATE OF PRONOUNCEMENT :03.09.2014 #6 / O R D E R PER N.K. BILLAIYA, AM: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LD. CIT(A)-31, MUMBAI DT. 16.12.2010 PERTAINING TO A.Y. 2006-07. 2. THE SOLE GRIEVANCE OF THE REVENUE IS THAT THE LD . CIT(A) ERRED IN DELETING THE ADDITION OF RS. 14,97,319/- AS UNEXPL AINED CASH CREDIT FROM SALE OF JEWELLERY U/S. 68 OF THE I.T. ACT. ITA NO. 1388/M/2011 2 3. THE ASSESSEE IS THE PROPRIETOR OF M/S. S.M. CO RPORATION WHICH IS ENGAGED IN THE BUSINESS OF TRADING OF UF RASIN AND OTHER ALLIED ITEMS. THE RETURN FOR THE YEAR WAS FILED ON 26.10.2006 DECLARI NG TOTAL INCOME AT RS. 3,01,460/-. THE RETURN WAS SELECTED FOR SCRUTINY A SSESSMENT. DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS SOLD PERSONAL JEWELLERY AMOUNTING TO RS. 14,97,319/-. THE ASSESSEE WAS ASKED TO FILE THE DETAILS. THE A SSESSEE FILED THE COPY OF ALL THE BILLS OF SALE OF JEWELLERY ALONGWITH BALANC E SHEET AND COPY OF WEALTH TAX RETURN FOR PRECEDING THREE YEARS. THE A O FOUND THAT THE GOLD ORNAMENTS SOLD AT 2705.920 GMS WERE NOT REFLECTED IN THE PERSONAL BALANCE SHEET AS ON 31.3.2005 AND 31.3.2004. THE A SSESSEE CLAIMED TO HAVE INHERITED THE SAID GOLD JEWELLERY FROM HIS FA THER WHO DIED IN 1989. THE AO OBSERVED THAT THE ASSESSEE HAS NOT SHOWN THE INHERITED GOLD ORNAMENTS IN HIS BALANCE SHEET AS ON 31.3.2005. FU RTHER, THE WEALTH TAX RETURN FOR A.Y. 2004-05 AND 2005-06 WERE FILED AFTE R THE SALE OF GOLD ORNAMENTS. THE AO FURTHER OBSERVED THAT THE ASSESS EE HAS PURCHASED SHARES, THE SOURCE BEING THE SALE OF GOLD JEWELLERY . INVOKING THE PROVISIONS OF SEC. 68 OF THE ACT, THE AO FINALLY CA ME TO THE CONCLUSION THAT THE SUM OF RS. 14,97,319/- CREDITED IN THE BOO KS OF THE ASSESSEE IS UNEXPLAINED CASH CREDIT AND ACCORDINGLY ADDED BACK RS. 14,97,319/- U/S. 68 OF THE ACT. 4. THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. C IT(A) AND REITERATED HIS CLAIM THAT THE GOLD JEWELLERY WAS IN HERITED BY HIM ON THE DEATH OF HIS FATHER. TO SUBSTANTIATE, THE ASSESSEE FILED THE COPY OF THE WILL OF HIS LATE FATHER STATING THAT THE AO HAS NEV ER CALLED FOR THE COPY OF THE WILL. ADMITTING THE EVIDENCE, THE LD. CIT(A ) CALLED FOR A REMAND REPORT FROM THE AO. THE AO IN HIS REMAND RE PORT DT. 29.9.2010 OBJECTED TO THE ADMISSION OF THE COPY OF THE WILL. ITA NO. 1388/M/2011 3 4.1. AFTER CONSIDERING THE FACTS AND THE SUBMISSION S AND THE REMAND REPORT, THE LD. CIT(A) ADMITTED THE COPY OF THE WIL L AS EVIDENCE AS THE SAID EVIDENCE HAS A DIRECT BEARING ON THE ISSUE IN HAND. THEREAFTER, THE LD. CIT(A) WAS CONVINCED WITH THE SOURCE OF RS. 1 4,97,319/- AND DELETED THE ADDITION MADE BY THE AO. 5. AGGRIEVED BY THIS, THE REVENUE IS BEFORE US. 6. THE LD. DEPARTMENTAL REPRESENTATIVE STRONGLY SUP PORTED THE FINDINGS OF THE AO. IT IS THE SAY OF THE DR THAT T O COVER UP THE SALE CONSIDERATION OF GOLD JEWELLERY, THE ASSESSEE FILED WEALTH TAX RETURN CLAIMING THAT HE HAS INHERITED GOLD JEWELLERY AS PE R THE WILL OF HIS LATE FATHER. THE LD. DR STRONGLY SUBMITTED THAT THE CON TENTS OF THE WILL HAVE NOT BEEN PROVED THEREFORE FINDINGS OF THE AO D ESERVES TO BE CONFIRMED. 7. PER CONTRA, THE LD. COUNSEL FOR THE ASSESSEE REI TERATED WHAT HAS BEEN SUBMITTED BEFORE THE LOWER AUTHORITIES. 8. WE HAVE CAREFULLY PERUSED THE ORDERS OF THE AUTH ORITIES BELOW. THE ISSUE IN HAND IS WHETHER THE DEPOSIT OF RS. 14,97,3 19/- HAS BEEN PROPERLY EXPLAINED BY THE ASSESSEE WITHIN THE PROVISIONS OF SEC. 68 OF THE ACT? THE SOURCE IS CLAIMED TO BE SALE CONSIDERATION OF G OLD JEWELLERY INHERITED BY THE ASSESSEE. THERE IS NO DISPUTE RELATING TO T HE SALE BILLS THAT PROVES THAT THE SALE CONSIDERATION IS WELL SUPPORTED BY PR OPER BILLS. THE ONLY POINT OF DISPUTE IS WHETHER THE ASSESSEE HAS ACTUAL LY INHERITED BY GOLD ORNAMENTS OR NOT. THE FACT OF THE MATTER IS THAT T HE GOLD ORNAMENTS HAVE ACTUALLY BEEN SOLD AND IF THE AO WAS DOUBTING THE P OSSESSION OF THE GOLD ORNAMENTS QUA WILL OF THE LATE FATHER OF THE ASSESS EE, THE AO COULD ITA NO. 1388/M/2011 4 HAVE PROCEEDED BY MAKING THE ADDITION ON ACCOUNT OF UNEXPLAINED INVESTMENT IN THE GOLD JEWELLERY BUT THAT IS NOT TH E CASE BEFORE US. SINCE THE ASSESSEE HAS SUCCESSFULLY EXPLAINED THE SOURCE OF DEPOSIT OF RS. 14,97,319/-, WE DO NOT FIND ANY REASON FOR MAKING A DDITION U/S. 68 OF THE ACT. 9. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 3 RD SEPTEMBER, 2014 SD/- SD/- (S.T.M. PAVALAN ) (N.K. BILLAIYA) #$ / JUDICIAL MEMBER ' #$ / ACCOUNTANT MEMBER MUMBAI; 7# DATED : 3 RD SEPTEMBER, 2014 . . ./ RJ , SR. PS #6 #6 #6 #6 2 22 2 /3 /3 /3 /3 8+3 8+3 8+3 8+3 / COPY OF THE ORDER FORWARDED TO : 1. ,. / THE APPELLANT 2. /0,. / THE RESPONDENT. 3. 9 ( ) / THE CIT(A)- 4. 9 / CIT 5. :; /3 , , / DR, ITAT, MUMBAI 6. ;& < / GUARD FILE. #6 #6 #6 #6 / BY ORDER, 03 /3 //TRUE COPY// = == = / > > > > (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI